Hua Hin property picking up

Hua Hin, where property prices have been stable for two years, is expected to see a full recovery next year as buyers overcome concerns over political instability, says Oliver Lutzi, Hua Hin office manager of the brokerage Engel & Volkers Thailand.

Property prices will not surge this year as the market belongs to buyers, he said. Yet, although the number of walk-in buyers has dropped, the take-up rate is high as buyers are keen to purchase, mainly for investment, he said.

During Hua Hin’s property boom, most buyers bought residential units for their own use, he said.

Current prices are also more reasonable than in the past, having stabilised since the slowdown that began in late 2008. Unlike markets such as the United States, where property prices have tumbled, economic turbulence has only had a marginal impact on property in Hua Hin, he said.

Hua Hin’s beachfront condominiums continue to be priced in two ranges – from 70,000 to 90,000 baht per square metre and from 100,000 to 140,000 baht – unchanged from the last two years, he said. Meanwhile, land prices have doubled over five years.

The Hua Hin market in the first quarter was healthier than in mid-2009, with signs of a pickup starting in the fourth quarter last year, he said.

Engel & Volkers currently has 1,700 inquiries showing interest in buying residential units in the area, he said. About 63% of requests are from Thai buyers, up from 50% in 2009, followed by buyers from Germany (6%) and from the UK and Ireland (6%). North America, Benelux countries, France and Singapore each provided 3% of inquiries.

Last year, a wealthy Russian petroleum owner and a Kazakhstan government minister broadened the profile of potential buyers in Hua Hin, following the entry of the high-end spa Chiva-som into Russia’s health care tourism market. Russian buyers are normally interested in Pattaya.

But these investors sought six-bedroom beachfront villas and residential units with branded-hotel management, categories of property that are not available in Hua Hin.

Last year, a buyer from Kazakhstan spent more than 100 million baht on a 20-rai beachfront plot to develop a villa project in Huay Yang, an emerging location south of Hua Hin.

During the first two months of this year, Engel & Volkers recorded 30 million baht in sales transactions in Hua Hin, while there were no sales in the same period last year.

Over 2010 the company expects 300 million baht in transactions. Currently, it has 132 beachfront and golf-course properties worth 1.9 billion baht on its listing, 90% of them resale units. Of the total, 76 properties are apartments and condominiums worth 814 million baht. Another 56 are villas and low-rise units with a total value of 1.1 billion baht.